Will Google Pay for YouTube's Copyright Infringements?

It's no secret that YouTube is chock full of copyright infringements and has exerted some effort to deal with the issue. But now the problem is all Google's.

With Monday's announcement that Google will purchase YouTube for $1.65 billion in stock, the question of the day is whether or not Google is ready to deal with the copyright baggage that comes with the video-sharing site.

"By itself, YouTube was vulnerable to lawsuits over hosting copyrighted content," wrote Forrester analysts Josh Bernoff and Brian Haven in a report published on Tuesday about the acquisition. "Now those same content owners' lawyers will take aim at Google's cash."

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Currently, YouTube holds that it is protected by the Digital Millennium Copyright Act (DMCA) of 1998, which stipulates that Web sites that are a "safe harbor" for content are not necessarily liable for that content. But YouTube has committed to making a more-than-token effort to filter illegal content from the site.

"The problem is that the more they go into editorial control, the less they can rely on the DMCA to protect them," said Randy Broberg, head of the intellectual property practice group at Allen Matkins LLP. "If you exercise editorial censorship, it becomes YouTube's content, which would make them more liable."

Though content owners may not have been happy with their content being shared on YouTube, the site has been able to avoid expensive lawsuits by simply not having much money to go after. But it does now. It has $1.65 billion, and everyone knows it.

To some degree, technology will help YouTube and/or Google filter out copyrighted content, but analysts say that many users know how to doctor up their postings so that it gets past the search filters.

"The searching technology is not 100 percent accurate, so you wind up with false positives and a lot of people know how to game the content," said Allen Weiner, an analyst with Gartner. "One technology can scan logos that indicate its network content, but believe me, people have figured out how to cover those over so it's not always effective. There is also a skin-tone scanning technology to scan for pornography. Well, it gives you a lot of false positives if you have video of someone bathing a baby."

Google says that it has monitoring systems for the video posted to its own video-sharing site, Google Video, but Bernoff says that it isn't very effective. And logistically speaking, it just does not make sense for Google to bulk up YouTube staff in order to visually monitor every posting. Too many video clips are posted every day to YouTube for human monitors to watch every single one.

One way to avoid liability is to allow the content providers to get involved, which is what vMix, a YouTube competitor, has done.

"We had people trying to upload 'Family Guy,' so we went to Fox and said, 'We have all of this content, we don't think it should be there, what do you want us to do with it?'" said Greg Kostello, founder of vMix. "So we actually created a whole channel for Fox, and we have links that are embedded that link back to any of the Fox properties that they want it to link back to."

Kostello says that the DMCA has not been proven to cover Web portals such as YouTube and vMix, which is why he'd rather play it safe than sorry with content providers. vMix has similar deals with Sony, Warner Brothers, Bravo and the Discovery Channel.

On Monday, YouTube and Google both announced content licensing deals with Universal and Sony BMG.

"The content provider agreements are the wise thing to do," Broberg said. "The more they can do to allow that content not to be a problem anymore, the better off YouTube will be; but still, there is no way to get them all."

Say, for example, someone posts a video from a wedding reception with a Britney Spears song playing in the background.

"Technically you're supposed to stop and write a check to the artist, and that's not the way the world works," said Richard F. Doherty, research director for The Envisioneering Group. "There is tremendous traffic, and the majority of the videos are personal expressions, but at the current rate, within a year, the majority of the videos may contain copyright infringements."

But will the content provider deals make YouTube more corporate than user-generated? If that's the case, YouTube would risk losing the appeal that made it popular to begin with.

"YouTube could create a portion of the site where people have to submit the videos for review, but that is sort of against the open-door philosophy that made them popular," Weiner said.

According to Weiner, the most popular copyright violations are for sharing episodes of "Family Guy," "American Dad," "Da Ali G Show," and "The Daily Show With Jon Stewart."

He estimates that the copyright tug-of-war will not be easily won for either side.

"This is a case in which there is no halfway solution. There are some gray areas where people have to be reasonable, like a song in the background at a wedding, but there is no question that premium content companies do not want consumers putting up unlicensed content."